New South Wales Supreme Court CITATION : The Owners - Strata Plan No. 69628 v Manly Council [2007] NSWSC 1137 HEARING DATE(S) : 11/10/2007 JUDGMENT DATE : 18 October 2007 JUDGMENT OF : Associate Justice Malpass DECISION : I consider that the appeal should be allowed. The decision and orders of the Magistrate are set aside. Whilst I consider that the proceedings in the Local Court as they are presently constituted should be dismissed, I reserve future consideration of that matter until the defendant has had an opportunity to consider whether or not it wishes to make application to amend the Statement of Claim. The defendant is to pay the costs of the Summons. If so entitled, it is to have a certificate under the Suitors Fund Act. CATCHWORDS : Power of Roads Authority to grant a short-term lease - of unused public roads - notice - compliance - conditions to exercise of power LEGISLATION CITED : Roads Act 1993 (NSW) McRae v Coulten (1986) 7 NSWLR 644 CASES CITED : Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 R v Connell (1944) 69 CLR 407 Tasker v Fullwood [1978] 1 NSWLR 20 PARTIES : The Owners - Strata Plan No. 69628 Manly Council FILE NUMBER(S) : SC 12750/07 COUNSEL : Mr D. H. Murr SC (Pl) Mr J. E. Armfield (Def) SOLICITORS : Harris & Company (Pl) Home Wilkinson Lowry, Lawyers (Def) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 13582/05 LOWER COURT JUDICIAL OFFICER : Lulham LCM LOWER COURT DATE OF DECISION : 04/05/2007 - 8 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE MALPASS 18 OCTOBER 2007 12750/07 The Owners - Strata Plan No. 69628 v Manly Council JUDGMENT 1 HIS HONOUR: On 18 December 2000, the defendant approved a development application. It involved the erection of shops and residences on a site located at the corner of Sydney Road and Hope Street, Seaforth. A part of the development has been described by the plaintiff as follows [at para 3.6 of their submissions]:- "The proposal in respect of which they sought development consent from Manly Council included a raised terrace with steps and handrails from street level, forming the main access from the street to the offices and shop. There were also some planter boxes and other decorative landscaping features. The terrace, steps, handrails, planter boxes and landscaping were not within the boundary of the subject land; they were to be located on the footpath on the Hope Street side of the building." 2 It was to be mainly located on part of the footpath in Hope Street (the leased land). I shall refer to this part of the development as the structures. At the time, this area was described as being a densely wooded garden bed (the garden bed). 3 On 31 May 2001, the defendant granted a five-year lease to the developers of the leased land. The lease was later assigned. The building was completed and a strata plan registered in respect of it. 4 Rather than assign the existing lease, on 30 July 2001 a second lease of the leased land was granted to the plaintiff for the balance of the original five-year term. This brought about a surrender of the first lease by operation of law. 5 The second lease contained insurance requirements in respect of which the plaintiff was unable to obtain insurance. No rent was paid pursuant to the second lease. 6 The defendant brought proceedings in the Local Court to recover the unpaid rent. A hearing took place before Lulham LCM. The Magistrate found in favour of the defendant. 7 The plaintiff now appeals to this Court as of right, alleging error in point of law. It bears the onus of demonstrating material error that justifies the disturbing of the decision of the Magistrate. 8 The hearing took place on 11 October 2007. The plaintiff proceeded on an Amended Summons filed in Court on that day. This process enumerates five grounds of appeal. 9 The primary issue is one of the power of the defendant council as a road authority to grant the lease. It is common ground that the only power it has is that to be found in the Roads Act 1993 (NSW) (the Act). The relevant provisions are to be found in Division 2 of Part 10 of the Act. The provisions are as follows:- "153 Short-term leases of unused public roads (1) A roads authority may lease land comprising a public road (other than a Crown road) to the owner or lessee of land adjoining the public road if, in its opinion, the road is not being used by the public. (2) However, a lease may not be granted under this Division with respect to land that has been acquired by the RTA under Division 3 of Part 12 (being land that forms part of a classified road) except by the RTA. (3) A lease granted under this Division may be terminated by the roads authority at any time and for any reason. 154 Public notice to be given of proposed lease (1) Before granting a lease under this Division, the roads authority must cause notice of the proposed lease: (a) to be published in a local newspaper, and (b) to be served on the owner of each parcel of land adjoining the length of public road concerned. (2) The notice: (a) must identify the public road concerned, and (b) must state that any person is entitled to make submissions to the roads authority with respect to the proposed lease, and (c) must indicate the manner in which, and the period (being at least 28 days) within which, any such submission should be made. 155 Public submissions Any person may make submissions to the roads authority with respect to the proposed lease. 156 Decision on proposed lease (1) After considering any submissions that have been duly made with respect to the proposed lease, the roads authority may grant the lease, either with or without alteration, or may refuse to grant the lease. (2) If the roads authority grants a lease, the roads authority must cause notice of that fact to be published in a local newspaper." 10 It can be observed at the outset that what was contemplated by the parties involved an inappropriate course of action. The only power had by the defendant was to grant a short-term lease (being one which did not exceed five years) which was being given in respect of a permanent structure. Presently, the structures remain on the footpath and there is no arrangement in place concerning them. This Court is concerned only with a peripheral dispute as to liability for rent under the second lease. 11 The power to grant such a lease is conferred upon "A roads authority". Pursuant to s7 of the Act, the council of a local government area is the roads authority for all public roads. "A roads authority" has such functions as are conferred on it by or under the Act or any other Act or law. Section 145 provides that all public roads (which includes footpaths) within a local government area are vested in fee simple in the appropriate roads authority. 12 Section 153 enables a short-term lease of land comprising a public road to the owner or lessee of land adjoining the public road if, in the opinion of the roads authority, the road is not being used by the public. The statutory language makes the forming of that opinion a condition of the exercise of the power. 13 As was said in R v Connell (1944) 69 CLR 407 at p430, legislation conferring such a power is treated as referring to an opinion which is such that it can be formed by a reasonable man who correctly understands the meaning of the law under which he acts. If it is shown that the opinion actually formed is not an opinion of this character then the necessary opinion does not exist. 14 Section 154 provides that before granting such a lease, the roads authority must cause notice of the proposed lease as directed therein (by publication in a local newspaper and service on adjoining owners). The section specifies what must be contained in the notice (inter alia, it must identify the public road concerned and state that "any person is entitled to make submissions to the roads authority"). Section 155 enables any person to make submissions to the roads authority with respect to the proposed lease. 15 Section 156 imposes a further condition to the exercise of the power. The power to grant a lease is only exercisable after considering any submissions that have been duly made with respect to the proposed lease. 16 The first ground of appeal relates to non-compliance with the notice provisions of s154 in respect of the first lease. There is a concession that there may have been a compliance with service on the adjoining owners. The challenge is directed to the publication in the local newspaper (in this case, The Manly Daily). 17 The purported notice in that publication made no mention of Hope Street. It did not either state that or even refer to the making of submissions (instead, it advised that objections needed to be lodged in writing). It did not state that any person was entitled to make submissions. 18 Because there are other matters that are determinative of this appeal, it is unnecessary to dwell on this ground. It suffices to say that, in my view, the purported notice published in the local newspaper did not bring about compliance with the provisions of s154. Indeed, it may be added that I consider that it did not bring about even substantial compliance. 19 For completeness I might add that the notice advised that the lease was for the purpose of a garden and landscaped area. It might be thought that this description gave a misleading impression of what was the purpose of the lease. 20 The second ground concerns the second lease. Because it involved different parties and a different term, it seems to me that it can only be regarded as a fresh lease. It was granted after the building had been completed and the structures had been erected on the leased land. 21 In respect of this lease, the defendant did not purport to perform the statutory processes. No public notice was given (and as a consequence there was no calling for the making of public submissions). 22 The third ground (which is referred to as 2A in the Amended Summons) concerns an allegation that the Magistrate failed to make a material finding. There was issue before the Magistrate as to whether or not the opinion formed by the defendant, that the road was not being used by the public, was reasonably open to it. At a late stage in the proceedings before the Local Court, there was a tender by the defendant of photographs of the garden bed in a purported attempt to deal with this issue. The Magistrate expressly dealt with the issue on the basis of what had been shown by the photographs and found in favour of the defendant. Whilst the plaintiff does not take issue with that finding, it contends that the Magistrate failed to address the situation as it was at the time of the granting of the second lease (when the garden bed had ceased to exist and the structures had been erected in place thereof). 23 It is common ground that the judgment of the Magistrate contains no reference to a finding on that aspect of the issue. The defendant relies on what was said by the Magistrate during the course of submissions. Following a submission in which Counsel for the plaintiff reiterated that, as at 10 June 2003, it was not open to the defendant to form the relevant opinion, the transcript records the following [at p 32]:- "Magistrate: The council having granted the lease to the then occupier, the fact then is that it's the occupier who allows public use of the land. Isn't that so?" Counsel for the plaintiff then continued with his submissions on the issue. 24 In my view, that observation cannot be treated either as a finding on what was raised by the submissions or as a disclosure of sufficient reasons for any such decision. I consider that the Magistrate misdirected himself and failed to address a material issue. 25 What was said by the Magistrate was no more than an observation made in the midst of the submissions put on the issue. It does not seem to be the product of full consideration. I should add that it might be thought that the relevant matter was whether or not there was public use rather than one of who allowed any public use of the leased land to take place. 26 The plaintiff says that in the changed conditions as at 10 June 2003 it was indisputable that the leased area was being used by members of the public (by way of access to the development). In contrast, the defendant takes an equally extreme but conflicting view. In my view, there was a real issue to be decided by the Magistrate and that if it be necessary to do so, the matter would have to be remitted back so that a finding may be made. 27 The Court has been taken to authority concerning the question of compliance with statutory procedural requirements (see, inter alia, Tasker v Fullwood [1978] 1 NSWLR 20, McRae v Coulten (1986) 7 NSWLR 644 and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355). The better view seems to be that the primary task of the Court is to solve the problem by the process of construction of the relevant statute. 28 It seems to me that, when the Act is properly construed, its provisions reveal that the power to grant a short-term lease did not arise until both the relevant opinion had been formed and a consideration had been made of any submissions made by the public to the roads authority. 29 In the present case these two matters stand in the path of the availability of the power. Firstly, a finding has to be made in relation to the relevant opinion. Secondly, because the defendant failed to perform the processes contemplated by s154, it failed to put itself in the position where the power conferred by s156 was available to it. Accordingly, I consider that the defendant did not have power to grant the second lease. 30 In the light of views that have been earlier expressed, it is unnecessary to address what is raised in the other grounds of appeal. 31 I consider that the appeal should be allowed. The decision and orders of the Magistrate are set aside. Whilst I consider that the proceedings in the Local Court as they are presently constituted should be dismissed, I reserve future consideration of that matter until the defendant has had an opportunity to consider whether or not it wishes to make application to amend the Statement of Claim. The defendant is to pay the costs of the Summons. If so entitled, it is to have a certificate under the Suitors Fund Act. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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